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Shapiro, Sidney A. --- "Occupational Safety and Health Regulation" [2009] ELECD 411; in Dau-Schmidt, G. Kenneth; Harris, D. Seth; Lobel, Orly (eds), "Labor and Employment Law and Economics" (Edward Elgar Publishing, 2009)

Book Title: Labor and Employment Law and Economics

Editor(s): Dau-Schmidt, G. Kenneth; Harris, D. Seth; Lobel, Orly

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847207296

Section: Chapter 9

Section Title: Occupational Safety and Health Regulation

Author(s): Shapiro, Sidney A.

Number of pages: 21

Extract:

9 Occupational safety and health
regulation
Sidney A. Shapiro


Economic theory predicts that workers will demand a `wage premium'
to compensate them for workplace safety and health risks. In response,
employers will reduce these risks until it is less expensive to pay employees
additional compensation than it is to invest in additional occupational
safety and health precautions. In this manner, efficient labor markets will
produce the abatement of some safety and health hazards, and workers
will be compensated by employers for the risks that remain.
Since the early 1900s, however, governments have rejected sole reliance
on labor markets to make adjustments in occupational safety and health.
Between 1911 and 1920, virtually every state in the United States enacted
some type of quasi-administrative scheme to award compensation for
workplace accidents. Today, all 50 states and the federal (US) government
administer such programs. In 1970, Congress enacted the Occupational
Safety and Health Act (OSH Act) empowering the Occupational Safety
and Health Administration (OSHA) to regulate workplace conditions
by, among other methods, the promulgation of safety and health regu-
lations known as `standards'. Other countries have also implemented
administrative regulation.
This chapter describes how the law and economics literature analyzes the
role of labor markets and administrative regulation in addressing occupa-
tional safety and health. Workers Compensation is the subject of a separate
chapter in this Encyclopedia. This chapter first describes how economic
theory understands the relationship between labor markets and adminis-
trative regulation and the role of each in reducing workplace ...